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Germany — Minister tells temporary employers and unions to do their homework

23 March 2010

In an interview with German weekly Der Spiegel, Employment Minister Ursula von der Leyen commented on Germany's system of minimum salary self-regulation by industry sector (Tarifvertrag) and the implications for the opening of the European Union (EU) market for temporary employment agencies in 2011.

Germany does not have a minimum salary as such. Minimum salaries are negotiated by industry sector via collective bargaining between employer organisations and unions. Temporary employment is its own sector and is represented by three different employers' organisations and several unions, which have in the past often not collaborated.

Von der Leyen told Der Spiegel, "collective bargaining between employer organisations and unions has served Germany very well because these people know best what conditions are appropriate in their sector. The government should not interfere. If employers and unions agree on a minimum salary, the government should support them."

"In most industry sectors there is already an open labour market in the EU. The few sectors, which are going to open next year tend to have sector-negotiated minimum salaries, which prevent 'dumping wages' from other EU countries."

"Temporary employment is however still a danger zone in that area. Which is why I would appreciate if temporary employer organisations and the relevant unions could quickly do their homework."

Temporary employment agencies from low-wage Eastern EU member countries are rumoured to be preparing for next year's opening of the EU temporary employment market with hourly pay rates, which are far below the German levels. Only if negotiated minimum salaries are in place, can such dumping be avoided.



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